Getting the Groups

“(Le) Poisson Rouge is always looking for new and creative ways to market to our existing or prospective customers,” says Kendel Ratley, marketing director for the New York City cabaret club. “Several people on our staff, including our co-founder Justin Kantor, had been early subscribers to the Groupon newsletter, and we very quickly brainstormed ways in which we might work with The Point on a groupon.”

Groupon evolved from a web site called The Point, which launched in November 2007. The web site allows individuals or companies to build campaigns, asking people to give money or do an activity as a group. The catch? It only works once a “tipping point” of people agree to participate — delaying action until enough people came together to have a real impact. The company then came up with the idea for Groupon to help ease the decision-making process of what to do on a night out. Groupon e-mail blasts participants a deal on one good or service each day, but the deal is only applicable if enough people purchase a Groupon. The Point’s framework allows for collective buying, so Groupon is able to offer exemplary deals. Launched in November 2008, Groupon features deals on things to do, see, eat and buy in cities across the United States.

“We settled on a gift card on Groupon, offering purchasers a 57 percent discount on food and beverage at the club,” Ratley explains. “One of the appealing features of the Groupon coupon is that there are no up-front costs. The income generated from each purchase is shared with The Point, so our club is giving up a portion of our profits from sales to The Point. Ultimately, the opportunity to bring in new costumers to our space is a bigger reward.”

(Le) Poisson Rouge offered $35 worth of food and drink for $15 — a coupon that was good from early August, when the blast went out, to six months beyond that.

“The only challenge on our end has been the redemption process,” Ratley says. “Our bar staff must manually check each Groupon code against a master list. An automated process for verification would speed up the transaction on our end and prevent the possibility of multiple redemptions.”